i

STRATEGIC CONSENSUS AND IMPLEMENTATION OF DIFFERENTIATION

STRATEGY BY HABIB BANK AG ZURICH-KENYA

BY

BANDA MAUREEN NGAIRA

A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE

REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF

BUSINESS ADMINISTRATION, SCHOOL OF BUSINESS, UNIVERSITY OF

NAIROBI

DECEMBER 2018

ii

DECLARATION

This research project is my original work and has not been submitted for examination in

any other university.

Signature………………………………. Date………………………………………

BANDA MAUREEN NGAIRA

D61/5042/2017

This research project has been submitted for examination with my approval as University

Supervisor

Signature…………………………….. Date…………………………………….

PROF. ZACHARY B. AWINO

SCHOOL OF BUSINESS

UNIVERSITY OF NAIROBI

iii

DEDICATION

This research project is dedicated to my family who if it wasn’t for them I would not

made it this far in my studies. To my friends who have been with me, helping me in every

step taking up the roles my family couldn’t.

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ACKNOWLEDGEMENT

My foremost gratitude goes to God almighty for the strength he has given me throughout

my studies. He’s been faithful in my life, the moral support, skills and assistance I have

been offered in order to make this research project a success.

My immense gratitude go to my supervisor Professor Zachary B. Awino for his

assistance and guidance ,correcting the path for this project for the many positive

criticism which have toughen me up, comments and suggestions that have enabled me to

come up with a refined project.

My final regards go to Habib Bank Ag Zurich staff for not only allowing and accepting

my request to use the organization as my case study but also giving me the information

that I required for the study despite their busy schedule. Despite the assistance accorded

to me from these people, I am solely responsible for this final report.

v

TABLE OF CONTENTS

DECLARATION............................................................................................................... ii

DEDICATION.................................................................................................................. iii

ACKNOWLEDGEMENT ............................................................................................... iv

ABBREVIATIONS AND ACRONYMS ...................................................................... viii

ABSTRACT ...................................................................................................................... ix

CHAPTER ONE: INTRODUCTION ............................................................................. 1

1.1 Background of the study ........................................................................................... 1

1.1.1 Strategic Consensus ............................................................................................ 3

1.1.2 Implementation of Differentiation Strategy ....................................................... 4

1.1.4 Commercial Banks in Kenya .............................................................................. 5

1.1.5 Habib Bank AG Zurich (Kenya) ........................................................................ 6

1.2 Research problem ...................................................................................................... 7

1.3 Research Objective .................................................................................................. 11

1.4 Value of the study ................................................................................................... 11

CHAPTER TWO: LITERATURE REVIEW .............................................................. 13

2.1 Introduction ............................................................................................................. 13

2.2 Theoretical Foundation ........................................................................................... 14

2.2.1 Dynamic Capability Theory ............................................................................. 14

2.2.2 Knowledge-Based Theory ................................................................................ 15

vi

2.2.3 Stakeholders Theory ......................................................................................... 16

2.4 Strategic Consensus and Implementation of Differentiation Strategy .................... 19

2.4 Empirical Studies and Knowledge Gaps ................................................................. 20

CHAPTER THREE: RESEARCH METHODOLOGY ............................................. 23

3.1 Introduction ............................................................................................................. 23

3.2 Research Design ...................................................................................................... 23

3.3 Data Collection ........................................................................................................ 24

3.4 Data Analysis .......................................................................................................... 25

CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION ................ 26

4.1 Introduction ............................................................................................................. 26

4.2 Demographic Information. ...................................................................................... 26

4.3. Consensus Building at Habib Bank Ag Zurich ...................................................... 27

4.3.1 Involvement in Strategy development .............................................................. 28

4.3.2 Alignment of departmental goals with organization goals. .............................. 29

4.3.3 Management interactions .................................................................................. 29

4.4 Factors affecting the Consensus-Implementation relationship ............................... 30

4.4.1 Influence of organization structure on consensus-implementation .................. 31

4.4.2 Influence of Leadership on consensus-implementation ................................... 32

4.4.3 Influence of Human Capital on consensus-implementation ............................. 33

4.5 Discussion of the findings ....................................................................................... 34

vii

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS .. 39

5.1 Introduction ............................................................................................................. 39

5.2 Summary of findings ............................................................................................... 39

5.3 Conclusion ............................................................................................................... 41

5.5 Recommendations ................................................................................................... 43

5.6 Limitation of the study ............................................................................................ 44

5.7 Suggestions for further studies ................................................................................ 45

REFERENCES ................................................................................................................ 46

APPENDICES ................................................................................................................. 53

Appendix 1: Interview Guide ....................................................................................... 53

Appendix 2: Data Collection Letter ............................................................................. 55

viii

ABBREVIATIONS AND ACRONYMS

CBK: Central Bank of Kenya

CEO: Chief Executive Officer

COO: Chief Operation Officer

FINMA: Swiss Financial Supervisory Authority

HBZ-K: Habib Bank Ag Zurich – Kenya

KBV: Knowledge Based View

SBU: Strategic Business Units

SME: Small and Medium Enterprises

SIC: Standard Industrial Classification

SPSS: Standard Industrial Classification

ix

ABSTRACT

Strategic consensus is the establishment of common understanding towards strategic

priorities and it has been linked to improved coordination and cooperation in the

implementation of strategies. Implementing a differentiation strategy requires consensus

for the cross functional cooperation which facilitate better strategy implementation. With

the intense competition among the commercial banks after the introduction of interest

caps bank shifted their focus to non-interest income by trying to be different in from their

competition. Habib Bank Ag Zurich which was the unit of analysis was in the process of

implementing differentiation strategy and the objective of the study was to establish the

factors that moderated the relationship between strategic consensus and implementation

of differentiation strategy in the bank. The research design used was a case study and the

primary data was collected using interview guides. Ten respondents were interviewed and

the data collected was analyzed using content analysis due to the qualitative nature of the

data. The findings of the study showed that the Leadership was centered in a way that

decision making was only done at the top management leaving out the rest of the

management levels piling the decisions to be made hence dragging the implementation

process. The findings also revealed that the organization structure was narrow but it only

encouraged one way communication which was top down and there was no proper

interaction between the departments and no proper convergence of ideas. The findings

further revealed that there was some sense of resistance from the workers as they were

not involved in the whole process also there was no proper match of the workers

competencies and the tasks; all the three factors hindered the implementation process by

slowing it down and not responding appropriately to the changing external environment.

The study concluded that there was a direct relationship between the factors identified

and the outcome of the relationship, there has to be a strategic fit between the strategy,

structure, leadership and employees even if consensus had been established earlier, the fit

enables further development of strategic consensus which would lead to a successful

implementation process.

1

CHAPTER ONE: INTRODUCTION

1.1 Background of the study

The argument underlying this research is that strategic consensus is linked to improved

coordination and cooperation in the implementation of strategy, and hence, with

organizational success. Organizations make strategic choices meant to attract

stakeholders but the success depends on how well the strategy chosen is implemented.

Implementing a differentiation strategy would require combined effort from different

areas to come up with products widely valued by customers (Porter, 1980).Shared

understanding among managers on the strategic priorities employed by an organization in

implementing differentiation strategy enables an organization establish a cross-

functional co-operation which facilitates better strategy implementations (Homburg,

Krohmer & Workman, 1999).

Various schools of thought can be used to explain the link between strategic consensus

and the implementation of differentiation strategy. It is imperative that organizations

operating in dynamic environments become knowledge based as it encourages a learning

culture within the organization that allows the acquisition, change and preservation of

organization capabilities. The dynamic capabilities theory asserts that tangible assets,

human capital and the intellectual power of an organization having developed together

over time are more valuable when combined than separately and give an organization a

competitive advantage (Douma, Sytse, Shreadee & Hein, 2013). Freeman (1984)

stakeholders’ theory argues that in rapidly changing business environments organizations

seek to create better value through a close relationship among the stakeholders.

2

To effectively implement strategies, organizations come up with unique approaches that

would suit both the internal and external challenges (Baroto,Arvand & Ahmad,2014).

According to Chepkoskei (2012), achieving successful implementation remains a

continuous challenge for all stakeholders especially if there are factors that would affect

the link between strategic consensus and the implementation of differentiation strategy.

Homburg et al, (1999) and Dess & Origer (1987) in their studies, they have established

that there are factors that dictate the outcome of the consensus-performance relationship

and market dynamism was mostly highlighted. If the factors are not clearly monitored

then the outcome of the relationship wouldn’t be attractive in the implementation process.

Market dynamism being an external factor and no research at least none that is known to

the researcher has identified any internal factors. This study will seek to identify the

organizational factors that would moderate the relationship.

Banks innovate market specific products as a way of targeting market segments and fast-

tracking digitization of internal processes which help the banks improve efficiency and

effectiveness hence bringing in the concept of differentiation. HBZ is no exception; being

a small bank the old decentralized business model made it difficult to manage operational

risks and controls. The increasing regulatory requirements made it less viable and so the

bank realigned by centralizing all key operations and remodeling branches from

processing units to marketing centers for business development and customer service and

they have to work together with the centralized operations to make the model a success.

This helps monitor the customers’ needs closely.

3

1.1.1 Strategic Consensus

Consensus at a business level means that there is a common understanding toward shared

goals and values among participants. It implies that everyone accepts and supports the

decision and they understand the reasons why the decisions were made. Based on the

general view of consensus, strategic consensus is the understanding of the strategic

priorities by all management levels of the organization (Kellerman,Walter, Lechner &

Floyd,2005). Strategy implementation requires more than a well-drawn plan, it also

requires a shared understanding of the strategy being implemented

(Kellerman,Walter,Lechner & Floyd,2005).

In most cases, strategies are not understood well due to some unanticipated issues that

come up and the details must be settled in a way that is consistent with the general

intentions. When there is shared understanding, managers are able to act rationally and

independently but in consistent with the actions of others and the spirit of the decision

(Amason, 1996). Initially developing a strategy was purely a top management task but

the middle and operating level mangers play a substantive role in coming up with a

strategy as they are the ones who come up with new ideas and are also a source of

variation. They provide the ideas for new initiatives championing the top manages and

officially changing the strategy (Burgelman, 1983).

4

According to Kellerman, Walter, Lechner & Floyd (2005), the involvement of managers

from other levels led to the evolution of strategic consensus reflecting the shared

understanding of the strategic priorities. Implementation at the functional level is brought

by the alignment and adjustment of key operating systems, processes and decisions

within the organization like resource allocation.

1.1.2 Implementation of Differentiation Strategy

The idea behind generic strategies is that competitive advantage is at the heart of any

strategy and in order to gain the competitive advantage firms have to make choices which

are central to an organization position in its relative industry(Porter,1998).Differentiation

strategy is one of the generic strategies whose main objective is to try and convince

customers to pay a premium price for the unique goods/services being offered by the

organization in an attempt to attract a broad market(Porter,1980).

The effectiveness of the strategy implementation depends on how well an organization

balances the benefits of its products and its costs relative to competitive offerings (Slater

& Olson, 2001).Firms in developing countries implementing the differentiation strategy

concentrate on dimensions such as image, gaining customer loyalty, quality, innovation,

level of services being offered all at the same time instead of focusing on one thing (Kim,

Nam & Stimpert, 2004).

5

Regardless of the strategy chosen by an organization, Noble (1999) & Schofield (2004)

are in the opinion that the implementation phase is messy and complex because of its

ambiguous and involvement of many departments. The complexities arise as a result of

the politics of the implementation process. Different personalities, politics,

communication problems, strategic consensus may undermine the implementation

(Pearce & Robinson, 1994).

1.1.4 Commercial Banks in Kenya

The Kenyan banking industry is viewed as one of the most developed in the east African

region. The industry is made up of 44 banks, 43 of them being commercial banks and the

44th

being CBK. The industry has been faced with global and domestic financial

challenges that have seen a number of banks collapse. Through CBK, the government has

set tough measures to ensure the stability of the industry (Muriithi and Louw, 2017).

The interest cap has forced banks to rethink their competing strategies by introducing

technology driven products to maintain their position (Musau, Muthee & Mwangi, 2018).

Initially banks used to compete on pricing of their product but since the introduction of

the price controls, different banks have the same price for their products (Mutindi, 2017).

Banks have had to redefine their strategies, by coming up with unique products.

It is however evident that the product in the industry are easily imitated by the rivals and

in order for the banks to stand out, they have to differentiate the quality of the products

provided (Cytonn, 2016).This helps in attracting new customers from their competitors

and retaining the existing ones.

6

Despite the interest rate capping the banks have become resilient, there has been an

increase in competition from both the local and international banks serving the Kenyan

economy. Banks have re-engineered their business models especially for the small banks

who had been hit by loss of deposits which affected their capacity to lend hence pushing

their customers to larger banks (CBK, 2018).The interest cap has made commercial banks

shift their revenue sources in favor of non-interest income whose share stood at 15.2% as

at June 2017 and increase from 12.4 before the introduction of the interest caps (CBK,

2018).

1.1.5 Habib Bank AG Zurich (Kenya)

HBZ was established in Switzerland in 1967 and has solid base of banking tradition. The

bank has been in operations for over 50 years where they have excelled in provision of

corporate, personal, private, and correspondent banking products. Services are offered via

its matchless capacity as an established institution, yet remain focused to its client’s

needs.

The bank offers high personalized services through its international network of banking

branches, subsidiaries and its affiliates. All the banking functions are overseen from the

head office located in Zurich Switzerland. The bank is seen as a leader and pioneer in

technology and it offers a range of services and products supported by the innovative

delivery channels.

7

As a bank incorporated in Swiss, privacy is adhered to strictly. This is guided by the

FINMA a financial regulatory body in Switzerland and several other international

banking regulators. The Bank started its operations in Kenya in 1978. Today, HBZ-K

operates five branches; three in Nairobi and two in Mombasa.

1.2 Research problem

Successful implementation remains a continuous challenge for all stakeholders as the

organization would need approaches that would suit the internal and external challenges.

Most studies on strategic consensus show that a higher level of consensus during the

implementation of differentiation strategy has a positive impact on the outcome. It is

argued that when there is consensus among all levels responsible for implementing the

strategy, there is improved co-ordination which in turn enables a more efficient

implementation process (Wooldridge & Floyd, 1992).

When there is consensus, self-interest is eliminated, co-operation is enhanced and there is

successful implementation of the strategy due to the diversity brought about by the

different backgrounds, experience values and personalities. The Kenyan banking industry

is a very dynamic business environment caused by the regulations, competition and the

customer awareness.

8

This has impacted on the goals and objectives of the players in the industry which has

seen most banks come up with products that would give them an edge over the other

players. HBZ-K is no exception, after years of being hesitant to embrace the changes in

the market; it has opted for differentiation strategy by centralizing all its key operations.

This is aimed at improving the bank’s performance and ensuring a sustainable position in

the industry and expanding its customer base.

Nandi (2017) undertook a study on the factors influencing strategy implementation at

Period Ricard. The researcher used a descriptive study conducted between June and

August 2017 by carrying out a census on all the 80 employees in the organization. The

researcher used Pearson Correlation to analyze the data and the findings showed that

strategic consensus acted as a shared understanding to a strategic directive between

individuals or groups within the organization.

Mutunga (2013) investigated the determinants of implementing a strategic plan in

Kenyan public hospitals 2008-2012 a case of Mbagathi level hospital. The exploratory

study was based on a sample of 80 which was obtained through stratified sampling from

all the hospital employees. The researcher used SPSS to analyze the data collected and

found that knowledge affected the implementation and that lack of shared understanding

led to inadequate implementation.

9

Nyakirega (2015) carried out a descriptive study on the factors that influenced the

implementation of strategic plans in public universities newly established. The study was

carried out between Nov 2014 and Feb 2015. The researcher used stratified sampling and

based on a sample of 123 the collected data was analyzed using descriptive and

inferential statistics. The findings showed that effective communication and consensus

influenced implementation of the strategies.

Mutisya (2016) carried out a descriptive study to establish the effects of strategy

implementation communication on employee commitment among pharmaceutical

companies in Nairobi Kenya and the study was carried out between Sep – Oct 2015.

Based on a census of 64 pharmaceutical companies, the data was analyzed by descriptive

statistics and the findings show that horizontal communication structure led to shared

understanding and successful implementation.

Bujis and Languth (2017) carried out an exploratory study to analyze the strategic

consensus building process in a merged organization in Sweden. Data analyzed was

based on all the 12 managers in the organization making it a census. The data collected

through face to face interviews was analyzed by transcription. Their findings show that

consensus on strategic priorities is necessary for the organization’s development and that

vertical communication, transparency and agility facilitate strategic consensus.

10

Zadi, Zawawi, Nordin and Ahnuar (2018) carried out a quantitative study to establish the

link between strategy implementation process and performance of construction

companies in Malaysia. Data was collected from 25 companies based on a specific grade

of the construction companies, Pearson Correlation was used to analyze the data and the

findings show that strategic priorities need to be understood by the employees which

improve their contribution to the successful implementation of the strategy.

Schaap (2006) conducted a study to investigate the relationship between effective

leadership and successful implementation in the Nevada casino industry. In all the senior

executives and supervisor, the researcher collected data based on 890 level leaders. The

data was analyzed using statistics software and the findings show that frequent up and

down communication in the organization structures enhanced strategic consensus by

promoting common attitude and values.

Homburg, Krohmer & Workman (1999) carried out a study to establish the link between

strategic consensus and performance collected data from SBUs in 3 industry sectors in

the US and Germany using a cross national sample of 101 firms for the generalizability

of the findings and analyzing the data using the SIC codes found that, consensus was

associated with performance for a differentiation strategy and dynamism was closely

linked to consensus hence positive effect on performance for differentiation strategy.

11

Granted that different studies have been undertaken to try and establish the link between

strategic consensus and implementation, the results consider that there are moderating

factors in the relationship (Bowman & Ambrosini, 1997, Homburg et al, 1999) key being

the market dynamism. Locally, there has been no study, at least none that the researcher

is aware of, that has sought to identify the factors that moderate the relationship.

Consequently, this gap that relates to studies done previously and the lack of research that

examine the relationship forms the motivation for undertaking the present research. This

therefore leads to the research question: what is the link between strategic consensus and

implementation of the differentiation strategy?

1.3 Research Objective

To establish the link between strategic consensus and implementation of differentiation

strategy factoring in the moderating factors.

1.4 Value of the study

The study was to benefit the academia, Habib Bank Ag Zurich and the banking industry

stakeholders. The management was be able to know the factors they should keep an eye

on that would end up destabilizing the consensus established and reacting to them

accordingly. The banking industry plays a key role in stabilizing the financial system of

the country, the study helped guide and shape the way forward towards the banks’ growth

in the dynamic environment.

12

In academia, the study was to be valuable to future academic research in the broader area

of Strategic consensus. The cumulative results from the study inspired more research to

establish more moderating factors; apart from just being a form of reference for future

studies the study suggests future research activities that can be explored.

The study was to ascertain that dynamic capabilities, knowledge and cordial relationship

among stakeholders were important for organizations implementing differentiation

strategy and the unique aspects in the organization fuel innovation. These were

considered to be key in establishing strategic consensus and come up with unique

products.

13

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

This chapter covers other research works on strategic consensus and strategy

implementation. It is based on a summary of and description of the current state of

knowledge that guided the study by avoiding duplication and analysing the structure of

their arguments and figure out how they addressed the issues.

The main sections covered in this chapter included; theoretical framework which focuses

on various school of thoughts that seek to explain the idea behind the study, the

implementation of differentiation strategy which focused on other factors that would

hinder the implementation of differentiation strategy and a review of empirical studies

which helped the researcher identify what had studies had found regarding the subject of

study.

The empirical studies included four local studies and four international studies where the

researchers tried to establish the link between strategic consensus and organization

performance mostly in the implementation of strategies. This guided the researcher in

avoiding duplication and clearly established the research gap for the study.

14

2.2 Theoretical Foundation

This section looked at various theories that were used to guide the study on the

relationship Strategic consensus and implementation of differentiation strategy. The study

was guided by three theories; dynamic capability theory, knowledge-based theory and the

stakeholders’ theory.

2.2.1 Dynamic Capability Theory

This theory was developed in order to improve the resource based theory which argues

that organizations secure competitive advantage based on the degree of rarity it enjoys in

its resources, and explains how organizations perform in dynamic environments focusing

on the capabilities they employ in order to gain competitive advantage (Beske, Land and

Seuring 2014). The theory argues that companies that are successful in their respective

industries respond appropriately towards the market dynamism (Teece and Pisano, 1994).

The banking industry is turbulent at the moment and with introduction of the non-interest

incomes, banks are coming up with very many innovative products that would set them

apart from the competitors. Most banks are employing the generic strategies

differentiation being the most commonly adopted strategy. Teece and Pisano (1994)

further argue that there must be co-ordination in the organization for it to take advantage

of the various competencies it has. Based on this theory, the dynamism is seen as the

capacity of organizations to renew its competencies in order to be in line with the

changing business environment. Strategic consensus comes in handy in coordinating all

the activities and resources to ensure that the organization’s stakeholders work together

smoothly and efficiently.

15

Once there is clear understanding of the strategic choices then the organization would

have an adaptive, absorptive and innovative capability. An organization is able to gain

competitive advantage through a collection of routines, skills and complementary assets

that are difficulty to imitate. Rivalry is inevitable in any industry and for that it is up to an

organization to constantly improve and develop new types of competencies in order to

cement its competitive positions (Teece and Pisano, 1994).

2.2.2 Knowledge-Based Theory

Knowledge is considered to be one the most important resources of an organization, just

like in the resource based theory Knowledge cannot be imitated its unique in its own

nature. When an organization is implementing a strategy is focuses or the ability of the

employees to embrace a learning culture leading to innovation as a basis of gaining a

competitive advantage. KBV states that firms exist to create and convert knowledge into

competitive advantage (Kogut & Zander, 1992). Knowledge leads to the development of

dynamic capabilities which have a capacity to transform knowledge into complementary

assets.

Knowledge is created through a combination of different views of people in the

organization which fuels innovation which is key in a differentiation strategy of a firm.

KBV supports the importance of having a common base of knowledge shared across the

organization which leads to the coordination of specialized knowledge. Development of

common knowledge domains and practices is very important for a firm seeking to

develop a sustainable competitive advantage, which is dependent on the knowledge

integration across the organization (Grant, 1996).

16

In the Kenyan banking industry, the dynamism require the banks to constantly come up

with innovative products, and to do that there must be shared understanding between all

parties involved in coming up with new ideas and products. The establishment of

common knowledge supports strategic consensus towards the development of unique

products for the already competitive market.

2.2.3 Stakeholders Theory

Stakeholders’ theory states that it is necessary for organizations to consider the interest of

the stakeholders as their investment have an impact on the organization’s performance.

Applying the stakeholder theory enables a business gain goodwill and cooperation of

stakeholders. Doing business requires values that the shared sense of created value brings

together business stakeholders hence generate great performance.

Harriosn, Bosse and Phillips (2010) argue that it is more useful for organizations to

create a cordial relationship among stakeholders in the process of creating value.

Organizations that have established cordial relationship between the business, groups and

individuals, have better chances to deal effectively with value creation in a rapidly

changing business context and explicitly connect business and ethics to effectively

deliver the desired finished product (Freeman, Colle, Harrison, Parmar and Wicks 2010).

17

Strategic consensus require managers to have clear and creative minds in order to think

about the methods they will apply in order to come up with products that will allow them

to differentiate the products from their competitors. Just like the stakeholders theory

suggests, strategic consensus is also in the view that companies create value by ensuring

all the stakeholders’ interest are aligned in the same direction (Freeman,2008).

2.3 Implementation of Differentiation Strategy

Implementing a differentiation strategy is supported by the alignment and the adjustment

of the main system, processes decisions within the organization which brings about

shared understanding toward the set out objectives and goals. Strategic consensus is just

but one of the factors that would determine how well the strategy would be implemented.

In this section will look at other determinants of successful implementation of the

strategy.

Regulations govern and control how thing are done in a business environment, they

affect the operability of organizations as they limit the applicability of strategies chosen

(Pehrsson, 2013). There has been a significant change in banking industry government re-

introduced section 44 of the banking act which seeks to control the bank charges. This

meant that the banks would only be able to charge premium prices for their products with

the approval of the Central Bank of Kenya even if such products were perceived by

customers as relatively superior in quality (Atieno, 2004). However, this approval is not

guaranteed and this brings the question of the extent of the implementation of

differentiation strategy in a controlled environment.

18

Culture is essential in coming up with a sustainable change which has a huge impact on

company’s competitive advantage. According to Brien (1998), most organization failures

have been linked to organization culture and failure to practice organization ethics. This

motivates employees from top to bottom to pursue growth oriented innovations focused

on competitive strategies. Organization culture helps an organization to distinguish itself

from its competitors which is the sole aim of a differentiation strategy. However

important culture is, if not taken care of well it would lead to failure in strategy

implementation (Martins ad Martins, 2003).

Organization structure defines how work is done by individuals and teams within an

organization. It specifies the span of control encourages formal communication and

describes how different individual actions are linked together. Organizations are

supposed to realign and restructure when environmental inefficiencies force them. In

order to properly implement a strategy, organizations are required to restructure its

processed to fit the strategy (Chandler, 1962), this always leads to structure stability.

Accurate monitoring of performance, facilitate comparison between division improving

resource allocation process (Hilt, Ireland and Hokisson, 2007). Implementing a

differentiation strategy would require a cross functional structure to support creativity

among product development teams which contribute to a development oriented culture.

19

2.4 Strategic Consensus and Implementation of Differentiation Strategy

Dynamic environments dictate that stakeholders are to be kept happy and loyal by the

service providers or they move elsewhere (Think Business, 2017). There has to be a

consensus among the organization participants during the implementation of any strategy.

If a corporate strategy does not emphasize on nurturing the success of each unit, the

strategy would end up failing regardless of how well it was structured (Porter, 1985).

According to Porter (1980), implementing a differentiation strategy would require

combined efforts from managers in different functions to come up with unique products.

Mile’s and Snow’s prospector strategy which is compared to the differentiation strategy

support the idea that managing conflicts and coming into consensus is very important for

a differentiation strategy (Ruckert & Walker, 1987).Without trying to achieve consensus,

managers from different function involved in the innovation process cannot resolve

conflicts, which has a negative implication on the implementation. On the other hand, if

there is agreement between business units co-operation will be enhanced thus successful

implementation of the strategy (Homburg, Krohmer & Workman, 1999).

Strategic consensus is a very significant factor in implementing a differentiation strategy

as it requires the understanding and commitment of functional managers. The diversity

brought about by the different backgrounds, experience, values and personalities

stimulate creativity and enhance innovation (Zahn, 2009).

20

2.4 Empirical Studies and Knowledge Gaps

Studies have been carried out to establish the link between strategic consensus and

implementation of strategies. Nyakirega (2015) undertook a descriptive study on the

factors that influenced the implementation of strategic plans in public universities newly

established. The study was conducted between Nov 2014 – Feb 2015 in a population of

123 respondents, the data collected was analyzed using descriptive and inferential

statistics and the study found effective communication and consensus influenced

implementation of the strategy.

Nandi (2017) carried out a descriptive research between June to august 2017 that

examined the factors influencing strategy implementation at Pernod Ricard. The

researcher collected data from all the 80 employees in the company and analyzed using

Pearson Correlation and the findings show that strategic consensus acted as a coordinator

to a strategic directive between individuals or groups within the organization.

Mutunga (2013) conducted an explanatory study investigating the determinants of

strategic plan implementation in Kenyan public hospitals 2008-2012 focusing on

Mbagathi level 4 Hospital. The researcher used stratified sampling to settle for 80 out of

all workers in the hospital, the data was analyzed using SPSS and found that leaders did

not involve the staff in the whole planning process and so there was no understanding

among the employee and that staff knowledge affected the implementation.

21

Mutisya (2016) undertook a descriptive study to establish the effect of strategy

implementation communication on employee commitment among pharmaceutical

companies in Nairobi Kenya. With a study population of 64 respondents the researcher

used census due to the size of the respondent hence no sample, the study took place

between Sep – Oct 2015. Data collected was analyzed using descriptive statistic which

led to the findings that the company used horizontal communication structure. This led to

shared understanding which played a big role in the implementation process.

Zadi, Zawawi, Nordin and Ahnuar (2018) carried out a quantitative study to establish the

link between strategy implementation process and performance of construction

companies in Malaysia. Data was collected from 25 companies based on a specific grade

of the construction companies, data was analyzed by Pearson Correlation and the findings

show that strategic priorities need to be understood by the employees which improve

their contribution to the successful strategy implementation.

Schaap (2006) conducted a study to investigate the relationship between effective

leadership and successful implementation in the Nevada casino industry. In all the senior

executives and supervisor, the researcher collected data based on 890 level leaders. The

date was analyzed using statistics software and the findings show that frequent

communication enhanced strategic consensus through shared attitude and values.

22

Homburg, Krohmer & Workman (1999) through their study to establish the relationship

between strategic consensus and performance collected data from SBUs in 3 industry

sectors in the US and Germany using a cross national sample of 101 firms for the

generalizability of the findings and analyzing the data using the SIC codes found that,

consensus was linked to success for a differentiation strategy.

The studies have supported the notion that shared understanding led to successful strategy

implementation leading to better performance of an organization. Global studies have

established moderating factors while the local studies have shied away from trying to find

out the variables or factors that moderate the relationship.

The studies have focused on external factors affect the outcome of the relationship, none

has established any internal factors and hence the motivation for carrying out this study

which will seek to find out the internal factors that moderate the outcome of the

relationship in the banking industry namely; resources, leadership and organization

structure.

23

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Introduction

The main purpose of the research was to find factors that moderated the relationship

between strategic consensus and implementation of differentiation strategy. The chapter

covered an outline of the approach and method used in conducting the study. This section

entailed the discussion of the summary of the research methodology which was used in

the study.

It focused on the research design, methods of data collection and was finalized with data

analysis and methods of data presentation that will be used in this study. The study tried

to measure the extent to which the interaction of the moderating variable and the

independent variable impacted the outcome of the dependent variable.

The data was collected from all five branches of HBZ-K which was the main context of

the study. The data was analyzed using the content due to it qualitative nature and it

helped examine the stakeholders’ perceptions.

3.2 Research Design

This is a plan that helps researchers conduct studies having maximum control over

elements that may hamper the validity of the outcome. The research design that was used

was a case study; this helped the researcher to closely study data within specific context

with a very limited number of individuals as a subject of Study. The HBZ is a small bank

and a case study was helpful since the researcher was able to cover all angles.

24

According to Tellis (1997),a case study would enable the researcher go beyond the

quantitative statistical results as it will also include qualitative data that will help explain

various processes through complete observation. It enables the researcher explore a

situation that will build understanding rather than prove a theory. The research design

was appropriate for the study as it helped provide insight and expand understanding of

the situation that was being studied.

This method was selected on the basis that it could collect diverse information types and

was quick and less costly. The respondents were easy to reach and were spread in all the

bank branches .The respondents were members of the different strategic teams handling

different aspects of the implementation process.

3.3 Data Collection

Primary data was used in the study which was obtained using an interview guide that

helped the researcher collect in-depth data for more insightful interpretations of the

results from the study. The data was to be collected from 10 respondents across all the

management levels in the bank. The respondents were part of the team that was

spearheading the strategy implementation process.

An interview guide is a set of questions asked by an interviewer during an interview

(Muthaura, 2014). The choice of the data collection instrument was based on the nature

of the data collected which was qualitative; this allowed the researcher to investigate the

respondent views in greater depth (Alshenqeeti, 2014).

25

This helped the researcher clarify ambiguities and in places of incomplete answers the

researcher was able to follow up. The interview guide was designed by the researcher

based on the research objective as attached in the Appendix 1. It contained two sections,

part A had questions on the demographics of the respondents and part B contained

questions on strategic consensus and implementation of the strategy.

3.4 Data Analysis

The collected data was qualitative in nature as it was collected using an interview guide

and based on this, the data was analyzed using content analysis. According to Haggarty

(1996), content analysis allows qualitative data to be analyzed systematically and reliably

so that generalization can be made. The analysis allowed the researcher to examine the

stakeholders’ perceptions on the implementation process of the strategy.

The analysis involves a systematic and qualitative description of the composition of the

objects or materials of the study (Neuendorf, 2016). The researcher observed and detailed

description of objects, items or things that comprise the object of study. The data was

compared to the school of thoughts covered in the literature review which enabled the

researcher to arrive at an informed interpretation and conclusion.

The mode of analysis was effective when it came to capturing in-depth opinion of

respondents. This was done by breaking down responses from the respondents into

meaningful unit to ascertain the characteristics of the message analysis and interpretation.

The final report was compiled and presented in Microsoft word after the data has been

analyzed.

26

CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION

4.1 Introduction

This chapter presents an analysis and findings of the study as set out in the research

objective and methodology. The objective of the study was to establish the link between

strategic consensus and implementation of differentiation strategy factoring in the

moderating factor in Habib Bank Ag Zurich.

The analysis and the results focus on the moderating factors, this are the factors that

affect the strength of the relationship between the independent and dependent variables.

The study clearly shows how the factors affect the outcome of the implementation

process.

The study targeted a total of ten interviewees comprising of all management levels across

the bank. The 10 included Head of Departments, Branch Managers, Bank Officers and

other departmental managers. Out of the targeted 10, one head of department, one branch

manager, two credit managers and five officers took part in the interviews with the

researcher thus giving a 90% response rate.

4.2 Demographic Information.

Demographic information was collected from the respondents to determine the suitability

of them taking part in the study as the information they were to provide was crucial. They

were required to indicate their gender; from the response given, three out of the nine

interviewees, three were female while the remaining numbers were male.

27

The respondents were also required to indicate the level of education of each interviewee,

five had attained post graduate education and four had graduate education. According to

Almanderez (2011) education is an engine of growth and key developments in the

society; he also argues that formal education is instrumental in the productivity and

development of an organization. The respondents were further required to indicate the

positions they held in bank, from the responses; one of the respondents was a head of

department, one was a branch manager, two were departmental managers and five were

departmental officers.

In order to determine how well the respondents understood strategy implementation

processes operations, they were asked to indicate their work experience. Based on the

responses it was established that the respondents had worked in the bank for an average

period of between 5 – 21 years. These findings indicate that the years they have worked

in the bank were enough to understand the operations and the factors that would affect

the consensus-implementation relationship. Therefore the information provided was

highly reliable.

4.3. Consensus Building at Habib Bank Ag Zurich

This section presents analysis and findings on how consensus on strategic priorities is

built in regards to strategy implementation at Habib Bank Ag Zurich. According to the

respondents interviewed involvement in strategy development, alignment of departmental

goals to the organization goals, interactions of all management levels and agreeing on

strategic priorities have a great impact in building consensus. These factors were

common among all respondents.

28

4.3.1 Involvement in Strategy development

The interviewees were asked to indicate whether they were involved in strategy

development; there was an overwhelming agreement among the interviewees that

involving all employees in strategy development has a strong influence on building

strategic consensus and hence leading to a successful strategy implementation. The study

revealed that there had been fairly adequate involvement in the strategy development

which informs the management levels of what is required of them.

In addition, they stated that participation and involvement of all levels of management

helped them acquire an understanding of the strategy leading to staff commitment. The

respondents were however of the opinion that engaging non-supervisory employees in

strategy development is also important and it guides them towards owning the strategy

which makes it easier to establish shared understanding towards the strategic priorities.

Excluding the lower level employees from the process slows down the strategy

implementation process as it becomes tedious since they will not take initiative towards a

strategy being forced on them.

Strategy implementation is an all-inclusive process that if one team is left out, the whole

process is crippled. The interviewees sighted that involving everyone in the organization

makes the restructuring and the realignment of the organization towards the new strategy

more easy and adoptable hence leading to a successful implementation. This is because it

helps the employees acquire both technical and interpersonal skills required to implement

the strategy.

29

4.3.2 Alignment of departmental goals with organization goals.

The interviewees were asked to indicate whether their department goals were in line

with bank’s goals. There was high level of agreement that departmental goals were in line

with organizational goals. The respondents indicated that the organizational goals were

cascaded down to individual employees and cumulatively they align the department goals

to the organizations goals.

According to the respondents the alignment of the department goals to the Banks’s

overall goals helped mitigate unnecessary risks that would have occurred if each

department was operating far from the organizational goals. Re-organization of

departments and cascading the overall organization goals to individual employees helped

put them in line for the adaptation of the new changes.

The respondents further indicated that achieving a proper alignment was up to the

departmental heads and so far the departments had no frictions terms of operations. There

has been a sense of personal power, good personality, trust and openness in the

departments towards reaching the overall organizational goals. Aligning goals and

objectives helped the departmental heads manage the performance.

4.3.3 Management interactions

Strategic consensus involves establishing a common understanding of the strategic

priorities among all management levels. Once there is a common understanding among

the different levels then communicating to the lower level employees becomes easier and

swift. This would require all managers to interact regularly and constantly as a way of

monitoring the progress of each process.

30

The interviewees indicated that there was barely meaningful interaction among the

different levels. Besides quarterly head of department meetings, memos and other

communication channels, information was being shared only on need to know basis. This

has brought about a missing link in the implementation process as the strategy and

implementation process is discussed at the top level management.

This brought about friction among the different levels as the strategic priorities become

unclear with inadequate interaction. The study further shows that due to inadequate

interaction between the management levels, there have been cases where there have been

difficulties in agreeing upon strategic issues. This has slowed down the implementation

process as it is hasn’t been clear on what is to be done.

4.4 Factors affecting the Consensus-Implementation relationship

It is clear that when there is consensus the implementation process becomes successful

hence leading to better performance of an organization. However there are various factors

that would affect the relationship either in a positive or a negative way, the interviewees

were asked various questions relating to the factors that affected the outcome of the

consensus-implementation relationship. The findings of the study are as shown in the

subsequent sections.

31

4.4.1 Influence of organization structure on consensus-implementation

The interviewees were asked to indicate how the organization structure influenced the

outcome of the relationship between consensus and the implementation of the strategy.

The responses revealed that organization structures play a major role in the

implementation process regardless of the level of understanding of the strategic priorities.

The respondents were of the view that strategy follows structure and so it was important

for the organization to restructure in line with the new strategy and processes.

The responses further revealed that an inappropriate structure slows down the

implementation process as the communication channels are not well established. The

respondents were of the view that the structure should be perfect for the organization as

too many layers in the structure bring about conflicts whereas a very narrow structure

hinders the strategy execution since the decisions are not properly decentralized.

The responses further revealed that lack of convergence of ideas across departments

affects the whole strategy. Feedback from lower level employees enables them to own the

strategy; a structure that encourages not only horizontal communication but also vertical

communication encourages the employees to fully participate in the process putting into

practice what has been decided upon by the management.

32

4.4.2 Influence of Leadership on consensus - implementation

The interviewees were asked to indicate how leadership influenced the outcome of the

relationship between consensus and strategy implementation. They indicated that

leadership was an essential element for an organization trying to implement a strategy

successfully. Leadership affects the interaction of all employees in the organization and if

not carried out well it affects smooth and timely implementation of the strategy.

The respondents indicated that there was no proper reinforcement of the strategy, the

respondents felt like the leadership did not support the new changes although it was fully

involve in the strategy development. This affected the uptake of the change by the lower

level employees hence also affecting the strategic relevance of the bank’s performance.

The respondents further revealed that the kind of leadership that centers all its decision

making at the top level has tight control over departments which trickles down to power,

procedure position and culture hence not providing a streamlined relationship for strategy

implementation. Good leadership encourages good communication which is very

important in strategy implementation as there is swift decision making regarding the

specific operational processes.

33

4.4.3 Influence of Human Capital on consensus-implementation

The interviewees were asked to indicate how the human capital affected the outcome of

the relationship between consensus and strategy implementation. They indicated that it

was human nature for people to reject change if they felt left out. Not involving the lower

level employees in the whole process due to inadequate communication lead to some

form of resistance as the strategy is not well understood and none is willing to own the

strategy which slows down the implementation process further. Human related factors are

much more important than the organization and system related factors.

The respondents also indicated that the human capital was not well placed in terms of

matching competencies and the tasks, no proper description of the tasks with also the

inadequate communication brought about resistance. The human capital was not well

placed in terms of matching competencies and the tasks, no proper description of the

tasks with also the inadequate communication brought about resistance.

They further indicated that, experience, knowledge, skills and abilities of the workers was

crucial in implementing the strategy. Inadequate human resource led to delays in

implementation due to lack of teamwork, team spirit geared towards the implementation.

This demotivates the workers and the level of commitment that is required to efficiently

and effectively implement the strategy is tempered with.

34

4.5 Discussion of the findings

In the present day business environment, almost all companies face some level of

competition and indeed the competition has become so stiff. The survival of these

companies is dependent on how well they respond to the environmental changes.

Throughout the study it is evident that strategic consensus is very important when

implementing differentiation strategy as it would require the efforts of different sections

of the organization. It is also very clear that the identified factors have slowed down the

implementation process. Decision making takes long which affects the operationalization

of the strategic priorities.

The findings are in support of the theories used in the study which were; the dynamic

capability theory, the knowledge based theory and the stakeholders theory. The dynamic

capability theory is coming out clearly in the findings; the theory by Teece et al (1994)

argues that there must be co-ordination in the organization for it to take advantage of the

various competencies it has to respond appropriately to the dynamic environment. It is

clear through the findings that lack of coordination in the Bank which is brought about by

regular interaction of the different management levels has clearly brought about disputes

towards strategic issues which has slowed down the implementation process affecting

the response rate to the changing environment.

35

The KBV is also coming out very clearly, from the findings a significant number of the

management staff are pursuing the educational careers which is evident from the level of

education the management staff have attained. Aligning academic and logical knowledge

to the appropriate tasks in order to come up with new products is seen as a very crucial

element in incorporating the human capital to the implementation process.

The stakeholders’ theory is coming out clearly as the importance of communication and

interaction across the whole organization is emphasized in the findings, involvement of

employees and interactions among all levels is identified to be the most important in the

implementation process. Harrison, Bosse and Phillips (2010) argue that it is more useful

for organizations to create a cordial relationship among stakeholders in the process of

creating value.

The study found that involving all levels of management in developing the strategy leads

to better understanding of the strategy and staff commitment hence increasing the

chances implementing the strategy successfully. This is supported by Ali (2017) who is in

the view that involving employees in the development of strategies has a positive impact

on how strategies are implemented. Periodic discussion and revision on the progress of

the implementation increases the chances for a successful implementation.

An organization is a sum of its entire people and this is why strategy implementation is

not a standalone activity. Involving employees encourages the right culture, helps build

capabilities which are very important in differentiation strategy, and creates high

performance work systems while maintaining proper communication channels (Eyceoz,

2009).

36

The study also revealed that aligning the departmental goals to the organizational goals

helped mitigate risks and leads to a sense of ownership during the implementation.

Misalignment of the goals often leads to resistance to the new change. This is supported

by Tarakci, Ates, Porck,Van Knippernberg, Groenen and De Haas (2014) that challenges

may come up in reaching an understanding towards strategic priorities as an

organizational network that has interdependent groups that have their own strategic sub

goals which are no in line with the organizations overall strategic goals. Listening to the

views of each member can uncover common agreements or potential areas of alignment.

One of the most challenging tasks of a leader is ensuring that everyone in the

organization is motivated towards the goals and objectives of the organization, (Gittens,

2012). Aligning the departmental goals to the organization goals is considered to be a

very crucial task; this is because the departments are made up of individuals who have

their own goals which are also supposed to be met.

The study further revealed that management interaction is a crucial element in

establishing strategic consensus; it is through the interaction that strategic issues are

communicated hence better understanding. It was also revealed that the interaction

between corporate level managers and other management levels is very important. This is

supported by Buijs & Languth, (2017) who argue that interactions enable further

development of strategic consensus which in turn eliminates any dispute regarding

strategic priorities.

37

Through the study it was revealed that a coherent and unified leadership provide

direction, inclusivity and transparency. Top leadership that owns the strategy that is being

implemented and through decentralizing the decision making process enhances

interaction which boosts the consensus hence improving chances of better

implementation. Buijs and Langguth (2017) are in support of this as they are in the view

that, centralized leadership brings about a sense of isolation in the organization bringing

about flaws in the decision making process as the decision keep piling up. Participative

leadership behavior triggers motivation of managers.

The study further revealed that organizational structures determine how long the

implementation process may take place. When there is tight control over the departments,

it does not streamline the relationship for strategy implementation. Convergence of ideas

across departments brings about successful implementation. Structures that support

frequent vertical interaction are beneficial for strategic consensus as they support

enthusiasm toward information sharing among the different departments in the

organization leading to the desired performance (George & Desmidt, 2016). Organization

structure defines how people work within an organization. It defines reporting lines,

encourages formal communication and explains how individual actions are linked

together. In order to properly implement strategies, organizations are required to

restructure their processes to fit the strategy (Chandler, 1962)

38

Through the study, it was revealed that the human resources are the actual implementers

of strategies, and any misalignment of the workforce to the different roles and tasks affect

the flow of the implementation process. This is supported by Rodomska (2014) who is in

the view that strategic awareness that manifests itself by the assignment of tasks and

decision making power are more important that their knowledge and skills.

Communication leads to better understanding of the set out ends which motivates them to

take initiative and fully own the implementation process.

39

CHAPTER FIVE: SUMMARY, CONCLUSION AND

RECOMMENDATIONS

5.1 Introduction

This chapter presents a summary of the key findings, conclusion, recommendations,

limitation of the study, and suggestions for further research. The research objective was

to find out the internal factors that affect the relationship between strategic consensus and

implementation of differentiation strategy.

A summary of the findings in support of thoughts used in the study, and for the specific

objectives will be looked at. A discussion of the implication of the findings and

recommendations will be provided based on the findings of the study as would have been

discussed in 5.2 and 5.3.

The chapter will also look at the weaknesses or the factors that the researcher would have

faced throughout the study that could have one way or another affected the outcome. The

chapter would finally look at the gaps that still exist that could form the basis of further

researcher.

5.2 Summary of findings

In summary, out of the nine management staff interviewed, a third of them were female.

This balance shows that the bank considers the efforts of every gender. The findings also

show that a significant number of the management staff was pursuing their educational

careers adopting the learning culture both within and outside the bank. It is also clear that

to attain any managerial or supervisory functions one must have an average of 5 years of

working experience in the bank.

40

The study supports the dynamic capability theory as it argues that there must be

coordination for an organization to take advantage of its competencies and from the

findings it’s clear that lack of coordination has brought disputes towards strategic issues.

The study however supports the knowledge based theory and the stakeholder’s theory.

Aligning the workforce with the skills, experience and the tasks bring about the aspect of

KBV, since each department that is involved in the coming up with the unique

products/services need to have a certain level of understanding of the goals in order for

them to give their all. The importance of the interactions as pointed out in the study

support the stakeholders’ theory which is in the view that all stakeholders have to be

involved in the development of the operations; this brings about understanding and

ownership of the process.

The factors the study found to influence the consensus-implementation relationship in the

bank included; leadership, organization structure and human capital. The findings show

that the leadership in the bank is structured in a way that all decision making is

centralized at the top. During strategy development all management levels were involved

however at the implementation stage only the top management is making decisions

The study revealed various factors that hindered the implementation of differentiation

strategy at Habib Bank Ag Zurich. These include organizational structure, leadership and

human capital. These factors hinder the implementation of the strategy as they slow down

the implementation process. As stated in the findings, centered organization structure

concentrates decision making at the top level management which makes the decision

making process slow which is very crucial for a differentiation strategy.

41

The findings also revealed that the organization structure is too narrow and there is no

proper span of control. This affects the implementation as the flow of information is

hindered, the communication only flows downward and there is no chance of lower level

employees to give feedback on the strategic issues. The findings further revealed that the

workers in the bank are not well placed in terms of matching their competencies and the

tasks. Also with no appropriate communication, there was some form of resistance

towards the changes being implemented.

5.3 Conclusion

Based on the research findings, the following conclusions are made regarding the study.

There must be a fit between the strategy and the leadership, strategy and structure and

strategy and employee involvement. The study confirms that there is direct relationship

between the factors and the outcome of the relationship; it concludes that the identified

factors have hindered the pace of which the strategy is being implemented. Poor

leadership, lack of communication and employee involvement destroys the consensus

earlier established for the purpose of implementing the study.

The bank should be alert to the fact that the banking sector is changing with stiff

competition from commercial banks and there is no room for mistakes in implementing

strategies. There is need for the bank to respond to the changing environment

appropriately at a reasonable pace. In some cases centered decision making is considered

to be a time saver but in the case of implementing differentiation strategy, participative

and decentralized leadership will be beneficial in the implementation process. This will

enable further development of strategic consensus and boost the implementation.

42

For the bank to successfully implement the new strategy, the factors identified in the

study need to be checked as they affect the flow of the whole process. Strategy follows

structure, leadership dictates the operationalization of the strategic priorities that have

been agreed upon and the human resource who are the actual implementers need to be

fully involved in the whole process. Convergence of ideas in all departmental levels is

important as it improves understanding of the desired performance .Adequate leadership

is required to develop strategic consensus, participative leadership encourages

communication as feedback is given on the progress of the implementation process.

It is important for the bank to align its processes and activities towards the

implementation. Realignment and restructuring is key, responding to the changes in the

environment does not stop at strategy development and agreeing on the strategic

priorities, it also involves fully taking part in operationalizing the strategic priorities.

Strategy implementation is an interactive process that is supposed to involve all the

employees in the bank, frequent interactions, clear communication swift decision making

and matching competencies to the tasks. Establishing a common level of understanding is

important but it cannot lead to successful implementation if the internal systems have not

been streamlined towards the established consensus. The bank should also note that its

capacity to compete effectively in the markets will come out of its internal competencies.

43

The bank should ensure that there is adequate information exchange that would make

communication more flexible to clearly convey information which would create a good

atmosphere in the organization. The management should support the understanding and

enthusiasm, incentives to employees to motivate them for he change and adopt the

leadership that gives responsibility to raise commitment and identification. The

relationship is all about inclusion of every party in the organization, and it should not stop

at that. Every party is expected to fully participate in coming up with decisions that

would satisfy everyone in the organization.

The study clearly reveals that it is important for the bank to keep an eye on all the factors

that build consensus since the same factors are the ones that affect the outcome of the

relationship between strategic consensus and the implementation of the strategy. Strategic

consensus is hard to develop and once it has been destroyed it becomes difficult for an

organization to implement a strategy. Through the study it is evident that the bank should

always be keen in developing the consensus further.

5.5 Recommendations

From the findings of the study the following recommendations are made; there is need to

involve all departments in decision making from the corporate to lower level. This will

enable free sharing of ideas on how new products/services can be developed to enhance

the quality of services being offered to clients. Regular meetings not only for the

management staff but the whole organization need to be enhanced.it is through the

meetings that the management will be able to track the progress of the implementation.

44

A learning organization supports innovation; more training should be done to boost the

level of innovation in the bank. The bank should not only depend on the academic

qualification of the workers but should also introduce in house training and the

management should be open to new ideas. The top management should therefore support

the implementation of these strategies by increasing the budget for employee training and

development and internal resources such as innovation and improvement of the brand.

The study clearly reveals that it is important for the bank to keep an eye on all the factors

that build consensus since the same factors are the ones that affect the outcome of the

relationship between strategic consensus and the implementation of the strategy. Strategic

consensus is hard to develop and once it has been destroyed it becomes difficult for an

organization to implement a strategy

The frameworks of implementing the strategy should be clearly defined and

communicated all the way so that everyone should have a sense of ownership, all

stakeholders should be involved fully. The developed consensus will motivate the

workers which will lead to a positive change of personal attitude towards change and

there will be no room for change resistance.

5.6 Limitation of the study

The major weakness of this study was that it was limited in scope and cannot be

overgeneralized. The study was taken based on a small Bank in a totally different context

and therefore there is limited room for comparison of findings with other larger banks

implementing different strategies and industries.

45

The research was a case study that involved an in-depth view courtesy of the analysis.

The study was subjected to how the researcher understood the information given hence

generalizing the findings may be unfavorable as no specific set out rules were followed in

collecting and analyzing the collected data.

This study was also limited in terms of the responses; the respondents may have been

biased in the answers they gave. The study only included nine interviews which makes

the generalization of the findings difficult. Further research may include more intensive

qualitative research and tis may lead the researchers to finding out more internal factors

that would affect the relationship. Involving more respondents would have been in order

to spread the representation of the said respondents in the study. Despite the identified

weaknesses, the findings of this study have an impact on organization policies.

5.7 Suggestions for further studies

The purpose of the study was to establish the factors affecting the relationship between

strategic consensus and implementation of differentiation strategy at Habib Bank Ag

Zurich (Kenya). This is one of the small banks which falls in tier three, further research

should be undertaken within a different context using a different research design to get

more insight on the extent of the situation in different industries.

Having as study whose respondents would include all staff levels would advance the

insight since that are all involved in the implementation .The focus would also be on the

lower level employees ,their involvement and the actual performance. Their input in the

success of the implementation is crucial hence it is important to have their view on the

whole process.

46

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APPENDICES

Appendix 1: Interview Guide

INSTRUCTIONS:

The information given on this questionnaire will be held with strict confidence and will

be used only for the purpose of the study.

TOPIC OF THE STUDY: STRATEGIC CONSENSUS AND IMPLEMENTATION

OF DIFFERENTIATION STRATEGY BY HABIB BANK AG ZURICH (KENYA)

Section A: General Information

1. Gender

Male Female

2. Level of education

College

University – Undergraduate

University – Post graduate and above

3. Position held in the bank

Manager Senior Manager Head of Department Officer

4. Work experience:

0 - 5 years

6 - 10 years

11 - 20 years

21 years or more

54

Section B: Strategic Consensus and Strategy Implementation

6 Were you involved in the development of the strategy for the bank?

7 Since when have been you involved in the process?

8 Do you have the feeling that the goals of your department are in line with the goals of

the organization?

9 How does the corporate level management interact with the other management levels?

10 Can you think of situations where there have been difficulties in finding an agreement

upon strategic issues? Explain.

11 How does the organizational structure help in the establishment of consensus on the

implementation process?

12 How does leadership help you in the establishment of consensus on the

implementation process?

13 How does Human Capital help in the establishment of consensus on the

implementation process?

11 What would you say has an impact on how the strategy is implemented? Explain

14 Do you have any other suggestions to improve shared understanding of the strategy? If

Yes, Explain.

Thank you for your willingness to participate.

55

Appendix 2: Data Collection Letter